San Diego's seafood dining scene will be getting a major boost later this year with the arrival of a well-known Los Angeles import that will take the place of a former downtown steakhouse.

Water Grill, a downtown Los Angeles mainstay for nearly 25 years, is coming to East Village as part of a major expansion effort by King's Seafood Company, which already operates two other San Diego restaurants.

In addition to spending $5 million on transforming the former two-story Palm restaurant into a new Water Grill, King's will also be undertaking a major redo of the bar at its Lou & Mickey's restaurant in the Gaslamp Quarter not far from Petco Park.

The Costa Mesa-based company is restructuring its operations and management structure to help execute its growth plans, which will focus on adding as many as 15 Water Grills over the next five years, with the first new location being San Diego. It is currently in negotiations for another Water Grill that would be located in south Orange County.

"We think Gaslamp has been so strong the last eight, nine years, and with the Padres and Convention Center down there and with all the housing that's taken off and the Palm location where it is, we believe we'll be right in the middle of it as everything moves east," said Sam King, CEO of King's Seafood, which also owns King's Fish House in Mission Valley. "It just makes sense for us to be that big, grand seafood restaurant that will also have private party capabilities."

Water Grill, a more upscale seafood dining venue with a casual vibe, boasts a huge diversity of fresh, seasonal seafood, from oysters and an extensive raw bar to cooked whole fish, Maine lobster and Santa Barbara spot prawns. Once it opens, by the end of the year, it will seat 275, and the second level will have a separate bar with space for private dining functions. Three 250- to 300-gallon tanks holding a variety of fresh seafood will also be a centerpiece of the restaurant.

The current space, vacated by the Palm at the end of last year, will be gutted, the second story rebuilt and a wall of windows 20 feet tall added along one side of the building at J Street and 6th Avenue. At one time, a local restaurateur had ambitious plans to reinvent the Palm as a seafood venue called Roosterfish, but that idea was later abandoned.

After King's Seafood debuted its second Water Grill last year in Santa Monica and quickly realized unanticipated, annualized revenues of $10 million, a decision was made to overhaul its organizational structure to concentrate on a Water Grill expansion while at the same nurturing its more casual dining concepts, King said.

"It surprised all of us, although we were very happy about it, but was like a bucking bronco," King said. "It really was straining everything else we were doing."

Now that new structure is in place, the company is also moving ahead with the Lou & Mickey's remodel, which in addition to a bar redesign and a revamped menu of artisanal cocktails, will feature a new wall of windows along 5th Avenue, King said. The restaurant will close for a couple of weeks in November and reopen in December.